Advances will benefit from the development of shale plays, especially in areas that have
not -- until recently -- been major energy producers and will require additional infrastructure.

US demand to rise 6.3%
annually through 2016

Demand for oil and gas infrastructure
equipment is forecast to rise 6.3 percent
annually through 2016 to $12.1 billion.
Advances will benefit from the development
of shale plays, especially in areas
that have not -- until recently -- been
major energy producers. These areas
will require additional infrastructure in
order to economically transport oil and
natural gas from the well site. For
example, pipeline capacity at the Bakken
Shale in North Dakota and Montana is
expected to more than double by 2016.

Upstream shale play
drilling to benefit demand

Oil and gas infrastructure equipment
demand will also benefit from increased
upstream drilling activity. Much of this
drilling activity is happening in previously
dormant or nontraditional areas, which
has created a demand for oil and gas
infrastructure. Low natural gas prices
have caused many producers to move
drill rigs from dry gas areas into the more
lucrative liquid plays. Strong liquid play
activity is happening in the Eagle Ford
Shale in Texas, the Bakken Shale in
North Dakota, and the Niobrara Shale in
Northern Colorado and Wyoming.
However, natural gas prices, while
currently low, are expected to recover by
2016. Expectations of this recovery are
boosting demand for natural gas pipelines
in areas such as the Marcellus
Shale.

Interstate pipeline expansion
to add opportunities

In addition to shale plays, significant
pipeline opportunities will result from
expansion of interstate pipelines. The
most notable project is the Keystone XL
pipeline, which would deliver crude oil
from the Canadian tar sands to the
southern US. The final portion of the
project has yet to be approved by the US
government, although such action is
expected within the forecast period.

Plastic pipe to outpace
dominant steel pipe types

Demand for pipe will benefit from
construction of new transmission lines
and the need for gathering systems at
new drilling sites. Plastic pipe will post
faster gains than steel due to widespread
use in gathering applications.
However, steel pipe will remain the
dominant material because of its high
pressure resistance. Welded pipe will
continue to comprise the majority of steel
pipe demand, due to its lower cost
compared to seamless pipe. Demand for
equipment such as valves, pumps, and
compressors will benefit from new and
expanding pipelines, given that this
equipment is necessary to manage oil
and gas flow through the system. Repair
and replacement activity will provide
opportunities across all product types,
because safety is a primary concern in
the industry.